EMA Trend Filter and RSI Pullback Entries with ATR-Based Exits

Summary

This short-term strategy uses a 200-period EMA to classify the main trend and a 10-period RSI to time pullback entries. It goes long above the EMA when RSI crosses below 40, and short below the EMA when RSI crosses above 60. The stated exit plan uses a stop four times the ATR and a profit target twice the stop distance, with position risk controlled as a share of portfolio value.

The document explains the indicator rules and suggests that trend filtering may help avoid some countertrend trades. It also notes that weakening or choppy trends can produce false signals, ATR stops may fit extreme conditions poorly, and signal frequency and RSI settings need monitoring. Although it describes the method as a template for further work, it provides no performance results; the published backtest settings cover only a brief BTC futures sample. The source itself cautions that the strategy is a starting point and was not designed for direct trading.

Key ideas

• A 200-period EMA determines whether the strategy may seek long or short entries.
• RSI pullback thresholds are 40 for long setups and 60 for short setups, using a 10-period RSI.
• The described exits use an ATR-based stop and a profit target set at twice the stop distance.
• Choppy conditions, unsuitable parameters, and extreme volatility can undermine the signals or stop placement.
• The published material gives no evidence of profitability and presents the strategy as a template.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.